Eurozone economic data shows mixed results for the euro

It was a busier day on the Eurozone economic calendar. The final December inflation figures for the Eurozone and German headline inflation figures were the focus of concern.

Eurozone inflation

In December, the euro zone’s annual inflation rate rose from 4.9% to 5.0%, which was in line with preliminary figures.

On a monthly basis, consumer prices increased by 0.4%. This also matched the preliminary numbers. In November, consumer prices also rose by 0.4%.

According to Eurostat,

  • A year earlier, the euro zone’s annual inflation rate was -0.3%.
  • The lowest annual inflation rates were recorded in Malta (2.6%) and Portugal (2.8%).
  • Estonia (12.0%) recorded the highest annual inflation rate, followed by Lithuania (10.7%).
  • The highest contribution to the euro area annual inflation rate comes from energy (+2.46 percentage points), followed by services (+1.02 pp), non-energy industrial goods (+0, 78 pp) and food, alcohol and tobacco (+0.71). dp).

Wholesale inflation in Germany

In December, the gross annual rate of inflation in Germany accelerated from 19.2% to 24.2% against 19.4% expected.

On a month-to-month basis, Germany’s PPI jumped 5.0% vs. 0.8% expected. In November, the PPI increased by 0.8%.

According to Destatis,

  • Year-on-year, the increase was the highest on record.
  • Compared to December 2020, energy prices increased by 69% and by 15.7% compared to November 2021.
  • Sharp increases in natural gas (distribution) and electricity prices boosted energy prices.
  • Excluding energy, the overall index is up 10.4% compared to December 2020.
  • Prices for intermediate goods increased by 19.3%, while prices for non-durable consumer goods increased by 4.7% compared to December 2020.

Market Impact

Prior to today’s data, the Euro had fallen to a pre-stat low of $1.13456.

In response to the data from Germany, the Euro hit a post-statistic and current high of $1.13690. However, after the Eurozone inflation figures were released, the Euro fell to a post-statistical and current low of $1.13331.

At the time of writing, the Euro was down 0.05% at $1.13372.


ECB monetary policy meeting minutes will be front and center ahead of U.S. jobless claims and Philly FED Manufacturing figures

As of the minutes, the markets will be on the lookout for any chatter on inflation and interest rates.

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